2005:216 SHU MASTER'S THESIS
Internationalization of Retailing in the Clothing Industry A Case Study of Dressmann
Aidin Saradjzadeh
Luleå University of Technology BSc and MSc Programmes in International Business Administration and Economics Department of Business Administration and Social Sciences Division of Industrial marketing and e-commerce
2005:216 SHU - ISSN: 1404-5508 - ISRN: LTU-SHU-EX--05/216--SE
ACKNOWLEDGEMENTS
This master’s thesis was written as a part of the program for Intentional Business and Economics at Luleå University of Technology. Although, sometimes to reach the goal has been hard and nearly impossible, the hard work that lead to the completion of this thesis has both been interesting and stimulating.
This thesis would not have been finished without the support of different people that I have met while working with this thesis. First of all I would like to thank my supervisor, Associate Professor Manucher Farhang, for his guidance and help. Without your help this thesis would not have been possible. Secondly, I would like to thank my family, my mother, father and brother for their unconditional love and support. A special thanks to my respondent Mr. Hansson, head of finance at Dressmann, Sweden. Considering his busy schedule, I greatly appreciate that you took the time to answer my questions, provide me with valuable information and knowledge, and demonstrate interest in my thesis. Last but not least I would like to thank my friends´ contributions through useful ideas and support.
Luleå University of Technology May 2005
Aidin Saradjzadeh
ABSTRACT
Competition within the clothing retail industry has increased incredibly during the past decade. Today one third of all the retailing companies around the world are active in the clothing-retailing sector. In order to succeed in fashion retailing business, planning and market research are important activities for the company to be able to choice the right target market. The aim of this thesis is to gain a better understanding of the process of internationalization of retailing in the clothing industry. To be able to learn more about this area and in order to gain wider knowledge a single case study is conducted. The case selected is that of Dressmann. Findings indicate that: (1) The main reason for a clothing retail company to enter foreign markets include a higher profit, economies of scale and offering a unique business concept for export; (2) For foreign market selection geographical proximity plays an important role. In addition access to knowledge on a specific market is also of value; (3) For the method of market entry, exporting plays an initial role but is supplemented with wholly owned subsidiary as market grows; (4) For the expansion strategy it is the factor of competitive environment that determines the firms behaviour.
SAMMANFATTNING
Växande konkurrens inom klädretailingindustrin har ökat ofattbart under det senaste årtiondet. Idag är en tredjedel av alla retailingföretag runtom i världen aktiva inom klädretailingindustrin. Planering och markandsundersökning är viktigt för att företaget ska lyckas välja rätt målmarknad inom mode retailingindustrin. Syftet med denna uppsats är att få en ökad förståelse för processen av internationalisering av retalingföretag inom klädindustrin. För att uppnå en mer fördjupad kunskap om detta område har en fallstudie utförts på klädretailing företaget Dressmann. Resultatet indikerar att: (1) Det främsta anledningen för klädretailing företag att introducera sig i en ny markand är högre vinst, stordriftsfördelar och en unik affärsidé för export; (2) Vid val av nya marknader spelar den geografiska närheten en stor roll. Viktig är också tillgång till kunskap om den nya markanden; (3) I metoden att etablera sig på en ny marknad spelar export en initial roll men blir ersatt av eget ägda dotterbolaget varefter marknaden växer; (4) Det är konkurrensmiljön som är den viktigaste faktorn och bestämmer företagets första drag när det gäller expansionsstrategi.
Table of Contents
1. Introduction ...... 1 1.1 Background ...... 1 1.2 Problem Discussion: Internationalization of Retailing ...... 2 1.3 Purpose...... 5 1.3.1 Research Questions ...... 5 1.4 Outline of the thesis...... 5 2. Review Of Literature ...... 6 2.1 Internationalization of the firm ...... 6 2.1.1 Why Internationalize? ...... 6 2.1.2 External forces affecting the increased Internationalization ...... 7 2.1.3 International Retailing...... 9 2.1.4 Reasons for Internationalization of Retailing Companies...... 10 2.2 Choice of the International Market ...... 14 2.2.1 Step one: Preliminary Screening...... 16 2.2.2 Step two: Estimating Market Potential...... 16 2.2.3 Step three: Estimating Sales Potential...... 17 2.2.4 Step four: Identifying Segments...... 17 2.3 International Entry Market Strategies for Retailing Companies...... 19 2.4 Expansion Strategies of Retailing Firms...... 22 2.4.1 Ability to Change in Retailing ...... 23 2.5 Conceptual Framework ...... 25 3. Methodology ...... 27 3.1 Research Purpose ...... 27 3.2 Research Approach ...... 27 3.3 Research Strategy...... 28 3.3.1 Case Study Design ...... 29 3.4 Data Collection Method ...... 30 3.4.1 Primary and Secondary Data...... 31 3.5 Sample Selection...... 32 3.6 Data Analysis ...... 32 3.7 Quality Standards: Validity and Reliability ...... 32 3.7.1 Reliability...... 32 3.7.2 Validity...... 34 4. Empirical Data...... 35 4.1 Company Background...... 35 4.2 Dressmann goes International ...... 35 4.3 Choice of the International market...... 37 4.4 Challenges of Internationalization ...... 38 4.5 Dressmanns´s Entry and Expansion in Foreign Markets ...... 40 5. Analysis ...... 42 5.1. Internationalization of Dressmann ...... 42 5.2 Choice of International Markets...... 45 5.3 International Entry Market Strategies ...... 47 5.4 Expansion Strategies ...... 47
6. Conclusions & Implications...... 49 6.1 Research Question One – Why do clothing retail companies enter international markets? ...... 49 6.2 Research Question Two - How do clothing retail companies select their foreign markets? ...... 50 6.3 Research Question Three - How do clothing retail companies choose their entry into foreign markets?...... 51 6.4 Research Question Four - How can the expansion strategies of clothing retailing companies in foreign markets be described?...... 51 6.5 Final Conclusion ...... 51 6.6 Implications...... 52 6.6.1 Implications for Management ...... 52 6.6.2 Implications for Theory and Further Research ...... 52 Appendices ...... 53 Appendix I...... 54 Appendix II ...... 56 REFERENCES ...... 58
List of Tables
Table 3.1: Relevant Situations for Different Research Strategies………..…………………..28 Table 3.2: Six Sources of Evidence: Strength and weaknesses………………..…………..…30 Table 3.3: Case Study Tactics for Four Design Tests………………………………………..33
List of Figures
Figure 1.1: The Distribution Channe ……………………………………….………..………4 Figure 1.2: Outline of the thesis…………………………………………….…………………5 Figure 2.1: Five External Forces driving towards increased internationalization....……...…8 Figure 2.2: The Screening Process in Target Market Choice……………………..………...10 Figure 2.3: Internationalization Choices…………………………………………………..…21 Figure 2.4: Types Of Retail Companies…………………………………………….…….…23 Figure 2.5: The Wheel Of Retailing………………………………………………..…….…24
Introduction
1. Introduction
This chapter will provide the background of the problem by brief presentation of retailing theories. The background will be fallowed by problem discussion that highlights the difficulties that retailing companies face when going internationally. This will lead to the purpose of the study and the research questions. Finally an outline of this research will be provided.
1.1 Background
As a result of global competition the phenomenon of internationalization is becoming increasingly important for companies today. One reason for the endless competition is according to (Daniels & Radebaugh, 1998) that the global market is no longer large enough for all the companies. Others like (Anderson, Graham & Lawrence, 1998) argue that the internationalization is becoming increasingly important given the tendency of a “borderless world”.
According to (Daniels & Radebaugh, 1998) there are several reasons for companies to enter the international arena today. The first reason for going international is to expand sales. Companies´ sales are dependent on two factors, the costumers´ interest in their products or ser services and the customers´ willingness and ability to buy them additionally, the products a company produces are often needed, not only in the home country, but also in other countries as well. The second factor for internationalization is to acquire resources. Manufacturers and distributors seek out products, services and components produced in foreign countries. They also look for foreign capital, technologies and information they can use at home. There are two main reasons for companies to engage themselves in such action. The first one is to reduce the company’s cost and the second reason to operate abroad is to provide something that is not available in the home country. Acquiring resources may make it possible for a company to improve its product quality and differentiate itself from competitors in both home and host country, which will eventually lead to an increasing market share and profits. The company could also use domestic resources to expand abroad. Once the foreign operation is in place, the foreign profits may then cover as resources for domestic operations. The third reason is to diversify sources of sales and suppliers to reduce swinging in sales and profits. Companies may seek out to foreign markets in order to take advantage of business cycle recessions and expansion differences among countries. Sales decrease in a country that is in recession and increases in a one that is expanding economically. By using the same product or component in different countries, companies may be able to avoid the full impact of price swings or shortages in any country. The last reason given for internationalization is to minimize competitive risk. Companies enter the international arena for defensive reasons. They want to counter advantages competitors might gain in foreign markets, which in turn, could hurt them domestically.
1 Introduction
(Czinkota & Ronkainen, 2001) and (Manlova et.al, 2002) argue that exporting is the most common strategy of international expansion. (Vida and Fairhurst, 1998) mentions other reasons for expansion like, import, solo venture, direct investment, joint venture or direct investment, licensing of a product or service, contracting and franchising. At the same time, global business has increased an opportunity that did not exist just two decades ago. Firms can today reach many more customers; product life cycles and consumers all over the world can find greater varieties of products of lower price. To benefit from the opportunities and deal with the diversities of international trade, businesses need to adapt the international marketing concept to let markets become a source of growth, profile and satisfaction. However, some companies have to work harder than others to be able to enter the international arena. An example of such companies are retailing companies that find themselves in constant change in order to be able to survive the internationalization of retailing industry (Ibid)
1.2 Problem Discussion: Internationalization of Retailing
During the past decade international retailing has become a new wave of international activity. This has lead to that more and more retailing companies are presented in more countries and many of them compete globally. Both retailing companies and individuals are today very much affected by the international trade. To be able to benefit from this, retailing companies must change their way of making business in the domestic market into an international retailing concept (Alexanders, Mayers , 2000). Retailers are involved in a variety of international activities. The international sourcing of products is one of the key functions of retailers who bring together a mixture of information from many sources. Retailers often copy ideas and management systems from competitors in other countries. Retail managers are recruited from other countries, bringing with them new retailing ideas and methods that can be a good foundation for the retail company. The financing of retailing is increasingly international as the large companies build finance for development, and call for funds, from the international financial institutions. To sell products and operate shops in more than one country, sometimes undertaking direct foreign investments, participation in licensing agreements, occasionally exporting products and sometimes becoming involved in joint ventures and operational alliances is also something that can bee seen as retailers international operations (Dawson, 1994).
Retailing definition and business can be described in many ways. Morgenstein and Strongin, (1992, p 5) define retiling as “ the selling of goods and services to their ultimate consumers, that is individuals who buy something for personal or household use.”
2 Introduction
The types of business that are involved in retailing are manufacturers, wholesalers and retailers. Manufacturers are the units that produces/makes the products that in the end is sold to the customers. The wholesalers, also called middlemen, do the purchase and distribution from the manufactures to the retailers. The retailers are the unit that sell the product to the final costumers. A products journey from the manufacturer to the final consumer can be explained as the channel of distribution. There are three ways of getting a product to the final consumer, which is illustrated, in Figure 1.1: (1). A manufacturer produces/makes a product. The product is then received by a wholesaler/middleman which has purchased the product by the order of the retailer. The received goods to the middleman will then be delivered to the retailer (store, grocery shop etc.), which will put the products out on the store floor in order to sell it to the final customer. (2). Sometimes the wholesaler/middleman will be left out. Some products are directly delivered to the retailer from the manufacture. Products that are delivered like this have often been ordered in advance by the retailer. This means that they only exist in limited quantity since they are based on an order. One example of such product is clothing. (3). Some products are directly delivered by the manufactures to the final costumer. One example of such product is cosmetics. The Avon product company, which is actually a cosmetics company, sell their products by going door to door. This is a perfect example of manufacture selling directly to the costumer. (Ibid)
As more and more retiling companies are becoming additionally involved in business between countries, they are realizing the dilemmas of international retailing. According to (Dawson 1994) “ international retailing may be defined as the operation, by a firm or alliance, of shops, or other forms of retail distribution, in more than one country”. Today experiential knowledge (experiences and skills) of the retailing manager and low perceived environmental uncertainties are important determinants of a retailing company. To retail in Europe is not the same thing as retailing in the United States. If a retailer wants to sell a product in the European Union (the EU) he/she must see to that the product meets the Unions ISO 9000 regulation which is product standard set by the International Organization for standardization. This rule is applied all the EU countries. However, to be able to do business abroad, retailers have to meet different set of regulations and requirements for each country they consider doing business in (Sternquis, 1998). Retailing companies that choose to export to countries that are psychically and culturally close to the home country, need less resources intensive investments. As retailing companies gain expertise in internationalization, they expand in a series of concentric circles to countries that are psychically and culturally more distant, which requires a greater resources commitments. The key explanatory variable in the process models is the “experiential market knowledge” of the company itself (Alexander & Mayers 2000)
3 Introduction
Figure 1.1: The Distribution Channel
Source: Adapted from: Morgenstein, Stoning, (1992) p. 5
According to (Pellegrini, 2001) there are several ways for a retiling company to enter a foreign market. The most usual way thought is through exporting to another country. Sternquist (1998) adds three other ways for a retailing company to enter the international market, licensing, joint venture and wholly owned subsidiary. How successful these strategies are depends on the retailing companies of the value added delivered to customers, through the performance of functions or activities. This value added must be firmly based upon customers needs and values, and may comprise both tangible and intangible or symbolic elements. The importance of fully understanding the source of the home market before moving into a foreign environment is crucially important for a retailers survival (Ibid).
According to Sternquist, (1998) and Czinkota & Ronkainen, (2001) a retailing company is more likely to choose a country close to the home market to retail in when considering internationalization. To retail in a country nearby does not necessarily mean that the retailing process will be easier. Some countries, despite their closeness to each other, differ very much, both in terms of culture and economy. This means that the retailing companies must change their way of doing business to be able to satisfy such markets. However there are companies who have succeeded to establish themselves globally without changing their ways of doing business. Example of such companies are the Swedish furniture company IKEA ( Arnold 2002) and the Swedish clothing retail company Hennes & Mauritz, internationally known as H&M (www.hm.com).
Considering the fast pace of internationalization of retailing in recent decades there have been limited empirical research on the topic. Scientific research has not documented whether the internationalization of major retailing companies- particularly with a view of the wide range of industrial and consumer products they are engaged in have fallowed the pattern suggested by such well-established internationalization theories as the Uppsala Model (Johansson and Vahlne, 1977). This gap in research motivated the present study. As the case of the clothing
4 Introduction retailers is one of the most prevalent on the international scene the study will focus on clothing retailing.
1.3 Purpose
The purpose of this thesis is to describe the process of internationalization of retailing in the clothing industry.
1.3.1 Research Questions
• Why do clothing retail companies enter the international? • How do clothing retail companies select their foreign markets? • How do clothing retail companies choose their entry into foreign markets? • How can the expansion strategies of clothing retail companies in foreign markets be described?
1.4 Outline of the thesis
As seen in Figure 1.2, this thesis consists of six chapters. Chapter one has already given an insight of what this thesis is about and also what the research questions of this thesis are. Chapter two consists of previous theories and research relevant for the purpose of this study. Also a frame of reference where a conceptualization of the research questions has been made is presented. Chapter three will provide the methodology that has been used in this thesis. In chapter four the data that has been collected for this thesis is presented. In chapter five the data gathered in chapter four is analysed, which leads to the final chapter of this thesis, chapter six where the findings and conclusions derived from the research, as well as the implication for management, theory and suggestions for further research are presented.
1. Intoduction
2. Literature Review
3. Methodology
4. Data Presentation
5. Data Analysis
6. Findings & Conclusions
Figure 1.2: Outline of the thesis
Source: Authors own construction
5 Review Of Litterature
2. Review Of Literature
This chapter will present theories that are relevant to the research questions outlined in chapter one. In order to make the connection between the four research questions, theories about internationalization in general are explain continuing with theories specific for internationalization of retailing companies.
2.1 Internationalization of the firm
In this following part theories regarding why companies internationalize are presented. It is important for one to know that regardless of kind of company it is, almost all companies have the same motivation to go internationally.
2.1.1 Why Internationalize?
To become aware of the international business opportunities is the first step for companies to commit to the international market. There are many factors that can push and pull companies to this path. (Czinkota, Ronkainen & Moffet, 1996) and (Czinkota, Ronkainen, 1998) have divided these factors into two major categories, proactive and reactive.
The proactive motivations stimulate the attempt to strategic change. The company’s internal forces that drive it towards internationalization are described by these factors. The most common reason for companies to enter the international arena is to gain better profits. The foreign market is often seen as a source of higher profit margins or as a source or more added- on profits. A proactive motivation to enter new markets can be a unique product or service. A not widely available product or service from international competitors can also give a proactive motivation to enter new markets. A company is likely to take advantage of a market that is not available for the competitors. Another motivation reflects the desire, drive and enthusiasm of management towards international business activities. To encourage export many countries offer tax concessions which leads to that export activities can be more profitable than domestic activities. Studies have also show that some companies expanding into a foreign market do it to seek economies of scale (Ibid).
A second type of motivation, primarily characterized as reactive motivations, influences firms to respond to environmental changes and process rather than to attempt to set trails. Competitive pressure is the main reactive motivation to enter the international market. Companies fear losing their domestic market share to foreign companies with benefits of international operations. Another reactive motivation to internationalize is overproduction. The company can have excess capacity that gives a powerful motivation to expand to the international market and therefore saturated or declining domestic market/or sales can force the company to enter the international filed. The final reactive motivation is physical closeness that can make companies expand internationally (Czinkota, Ronkaeinen, 1998) and (Czinkota, Ronkainen & Moffet, 1996).
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2.1.2 External forces affecting the increased Internationalization
Companies have no choice and must sometimes move towards a more global market. The most common factors that are driving the companies to an international expansion are the external forces. (Braker, Walker & Walker, 1995) have grouped the external forces into five groups, cost, technological advance, competitive environment, governmental policies and market force.
Many companies are driven to internationalization by factors related to cost. Additional advantage in the efficiency of sourcing is gained by economic of scale and scope, which benefit the international enterprises. Despite currency fluctuations, the favorable logistic costs lure the companies to internationalize. Many countries have major differences between skills and manufacturing costs that may encourage companies to implement multinational operations. The new ways to compute monetary policies and the currency foundations have reduced costs of international operations (Ibid).
The methods and speed of communication has changed through technological advance. Today data, voice, text and images can be transferred instantly allover the world. Many companies have by changing their ways of doing business, taken advantage of the new communication, manufacturing, and distribution methods. Compared to the old methods, the new technology gives more flexibility to manufacturing and distribution. The time needed for product development and delivery has also been reduced with the help of better technology (Ibid).
Due to the strong competitive environment, powerful trading blocks like the European Community has been brought up. Productivity is increasing and so are the industrialized and advanced industrial nations. Heavy competition is noticed in many domestic markets. The international environment is built by growing member of strategic allegiances like mergers and acquisitions (Ibid).
Encouragements to enter the international arena can also be made by governmental policies. Today, government have banished some trade barriers and introduced favorable trade policies and policies that make the currency capital flow easier. This is all made to make it easier for companies to internationalize. The urge to harmonize technical standards and marketing regulations is today very strong. (Ibid)
The homogenous demands all over the world, global customers, transferable marketing, and saturation of home market are market forces that are forcing companies to internationalization. Consumers around the world see quality, price, and service identically. Multinational corporations and larger organizations have global presence and they pull their suppliers global. Advertising campaigns are often designed for international use and more and more brands are being recognized internationally. In the service industries many firms are reaching maturity and product saturation in existing methods (Ibid).
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Figure 2.1: Five External Forces driving towards increased internationalization
Source: (Brake, Walker &Walker, 1995 p.8)
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2.1.3 International Retailing
In this section a brief explanation about international retailing will be presented to make it easier to understand why retailing companies act as they do.
What is International Retailing
International Retailing includes all the activities involved in Selling goods or services directly to final consumers for their personal, non-business use. Retailing is geographically tied. Retailers need do have physical presence is needed in the foreign markets to be able to start retailing businesses there. The psychically presences is very important where business is done. Each country in the world has it rules and regulations for retailing. To retail in Europe is not the same thing as retailing in the United States. The diverse environment of the international market requires retailers to have both knowledge and experience. If a retailer wants to sell a product in the European Union (the EU) he/she must see to that the product meets the unions ISO 9000 regulation which is product standard set by the International Organization for standardization. This rule is applied all the EU countries which also explains why the EU member countries have one common harmonized standard. However, to be able to do business in Europe the retailers have to meet different set of regulations and requirements for each country they consider doing business in (Sternquist, 1998).
There are several factors that a retailer gets affected of whether the business is done in a single country or throughout the world. The most important one is economic geographic. Consumers who are geographically close may be vastly different economically. For example retailing in Malaysia is different from retailing in Singapore; although the countries are very close to each other, the way of retailing in these countries differ greatly from each other. The Malaysian economy is not very strong and retailing there is considered to be quite primitive. On the other hand retailing in Singapore, which has a stable economy, is much more sophisticated. Retail growth is based on economic borders (Sternquist, 1998). For retailer to succeed in the domestic market marketing and consumer focus has become very curtail. Retailers today put much effort in to developing, manufacturing and managing store and corporate image. This image often consist of the associated positioning and branding of the retailer. It is also the source of competitive degree especially as many other functional aspects of a retail operation can be imitated. More and more retailers base their competitive advantage upon an overall market image. It is important for managers to consider which elements of image that are the most important contributors in developing the retail proposition and whether absolute or relative measures of perceptions between markets are the key determinants or not (Williams, 1992) and (Sternquist, 1998).
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Fashion Retailing
This section will provide you with some theories about retailing in the fashion industry.
Why is Fashion Retailing Successful?
According to (Doherty, 2001) and (Dawson, 1994) fashion retailing has consistently proved itself to be among the most prolific and successful among international retailers. Today, the fashion-retailing sector is the most internationalized with over one third of all international retailers belonging to the sector. Fashion retailers have a tendency to be more successful internationally compared to other retailing sectors. According to (Doherty, 2001) the fashion retailing industry is successful because of the following factors.
• Small format requiring limited capitals and management set up costs. • Ease of entry and exit compared to manufacturing • Single brand format enables internationalization • More suited to franchising than non-food formats • Economies of replication
2.1.4 Reasons for Internationalization of Retailing Companies
The following section will present theories concerning why retailing companies choice to Internationalize.
According to (Alexanders, 2001) and (Akehurst, Alexander, 1995) there are two important answers why retailers invest in foreign markets, saturation in the home market and the desire to export a particular retail offering which will occupy an as yet unfilled niche in a foreign market. Studies have show that saturation indeed has lead to internationalization. Saturation can be either in one retail sector or more than one retail sector where a strategy of diversification has been used to achieve growth when the retailer’s core activity has already reached saturation point. However, saturation may be such that the retailer concerned has not only achieved saturation in terms of its primary activity, but also reached saturation as far its diversified activities are concerned. The levels of saturation are determined as much by market size as by regulatory bodies. It should be noted that some retailers expand because they have reached saturation level and because they have the potential to fill niches in other markets. Saturation is certainly relevant to internationalization retailing expansion. However, they are not the only reasons for expansion.
(Williams, 1992), argues that the expansion of international retailing companies is caused by several obvious factors which according to him are:
• Various growth-rated motives, when internationalization is a means to increase sales and profits, expansion into underdeveloped markets with larger higher growth rates, and when expansion goals cannot be achieved domestically.
• Limited opportunities for growth in retailers domestic markets due to the market maturity, saturation and dominance, increased competition exhausted or unsuitable diversification prospects and excessive regulations.
• Motives derived from an internationally appealing and innovative retail concept.
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• Various passive and subjective motives including imitating competitors responding to offer from foreign retailers, surplus resources and depressed share prices.
• Motivations related to the transfer of retail “know-how” and techniques, senior management drive and economies of scale
(Dawson, 1994) mentions other factors why retailing companies chose to internationalize. He also pints out that these factors are not necessarily reasons for successful moves but they are important to consider.
• Limited placed on domestic growth in the home country by public policy controlling new store development or limiting further growth in market share of a firm.
• Higher profits obtained in the host country because of differences I competitive and/or cost structures.
• An opportunity to get access to new management ideas or technology which will then be transferred to the home country; this may be important in areas such as use of information technology.
• Removal of barriers to entry, notably in the single market initiative in Europe, which may reduce attraction of joint venture in favour of international expansion.
• Fallow existing customers abroad; the establishment of small branches of major Japanese department stores in major European capital cities allows loyal customers to continue using the store when on holiday or working in the host country. The opportunity to realize monopolistic profits and to gain access to the most profitable segments by being the pioneer in a new market.
(Sternquist, 1998) mentions several other reasons why retailing companies chooses to expand internationally which are: Mature home market low growth potential, need to diversify investment, expansion at home blocked by legislation, possession of a unique market format, intense competition at home, economic downturn at home, first-mover advantage
Mature home market low growth potential
Just like a product, retail formats also go through the four stages in the life cycle: introduction, growth, maturity and decline. When a retail format has reached the maturity stage, it will not continue to show growth in sales. Retail format that is “old” in the home country may be seen as new and interesting in a foreign market. When retailers consider expansion in a foreign market they view the expansion by using the same existing retail format. By doing so the retailer will take less risk than staying home and adapting to a new retail format. Studies have shown that most of the larger retail companies expand to less developed countries. Example of one such company is Wal-mart’s expansion in Mexico and China.
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Need to diversify investment
An example of a diversity investment is the case of the Belgian family-owned food retail company Delhaize in the 1970´s. The company had decided not to have its investment in Europe. The company set its mind on the United States and obtained the Food Lion supermarket chain. But Delhaize did not take over the day-by-day operation and management of Food Lion. The company later bought up the whole Food Lion chain, which was not part of their plan in the company’s diversification process. Some countries are more attractive to retailers then others. But the United States is among the most popular countries to enter when it comes to retailing. This is because the countries stabile political climate and its low level of governmental influence in the business operation. Another fact that makes the US such an attractive market is the fact that it is one of the over-stored countries in the world. This phenomenon can in some cases even lead to a market state, referred to as domestic cannibalism, in which the increase of sales in one store is obtained at the expense of another store.
Expansion at home blocked by legislation
Different countries have different laws when it comes to retailing. In some countries the rules are so strict that it limits retail expansion. It could for example be to restrict a retailer’s ability to dismiss employees and regulate hours of operation. One country in the world that has strict laws when it comes to retailing is Japan. In Japan there is a law called Daiten Ho (Larger- Scale Retail Store Law). This law once regulated the opening of stores, which were over 1000 square meters. After a time a suggestion to build a larger store was presented, the small stores in the are where not keen of having I larger store as a competitor so they decided not to have the large store as there neighbour. This is why it took almost 10 years for a new store to open up in Japan several years ago. The law was applied to protect small businesses and employees. The consequence of this became that the United States started an intense pressure towards Japan, which finally in 1990 and 1997 introduced a new measure that would reduce the opening time of a new store from 10 years to just 18 months. Similar laws are also recognized in both Belgium and France.
Possession of a unique market format
In retailing it is difficult to protect new ideas since retail renewals cannot be patented or copyrighted. It is very usual that once a new idea is introduced competitors begin to imitate it. One of the best ways and maybe the most effective is to export the benefits of the new format to a foreign market. This will be done with the knowledge that, if the retail company dose not expand, their competitors will imitate them and copy their unique format. An example of a company that has used such method is The Body Shop. The company is a retails bath supplies chain with a unique assortment of secants and all-natural ingredients. In 1997 The Body Shop was the only company in the world that had operated without any formal marketing officer for 17 years. Then the same year the first vice president of marketing was appointed. The Body Shop is only one example of how successful a company can become by having a unique concept.
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Intense competition at home
In some markets for example (United States and Japan) the level of competition within retailing is so strong that retailers in these countries often chose to enter other markets with larger growth potential and less competition. The large amount of Japanese departments stores that has moved into Hong Kong is a perfect example of such feature. Another example is the US company Kmart and their major competitors Wal-Mart. The two companies are each other’s major competitor. When Kmart lost the battle towards Wal-Mart for supremacy, the company decided to expand internationally where they did not have competition from Wal- Mart. But, Kmart expansion into the Czech Republic, Slovakia, Singapore and Mexico did not go as planned and the company has withdrawn.
Economic downturn at home
An additional advantage that retailers have is that they are able to open new stores with a little lead time (expect in those where the legislation are more strict). If the home country economy culture is less then optimal, a retailer can quickly move into another location. Retailers are greatly affected by a recession in the home market. When the home market economy is poor and the chances of expanding is not good, international expansion can become very pressing. But the retailer must see to that the economic culture in the foreign market that they are planning to enter in is stabile otherwise the chances of earning good profits will become low. In 1994 Wal-Mart expanded in Mexico just before the country devaluated. This affected the Mexican economy negatively and Wal-Mart’s plan of expansion was delayed until the Mexican economy was in balance again.
First-mover advantage
The most important factor for a retailer’s success is to find an attractive location. Every city has a limited number of ideal locations; this is why it is extremely important to be first in the market, while the best locations still are available. An example of this is the Japanese retailer
Seibu that only entered the Hong Kong market when a location in one of the cities most attractive and major shopping areas (Pacific Palace) became available. If a retailer enters a new market at the “wrong” (not attractive) location, he future of that retailer will not be bright. A “Good location is that important, that it can be the decisive factor in a company’s decision to expand internationally”.
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Problems with Expanding Internationally
Of course there are always problems with taking a business internationally. In this section some problems that can occur for retailers while expanding internationally are presented.
When retail companies try to expand into the international arena, there are certain problems that can occur. According to (Alexanders, 2000) site acquisitions is the most notable issue. The problems of site acquisitions, which are recruitment and staffing, language, different competitive conditions, different consumers tastes, and different social conditions, can be larger than what a company can imagine. The emphasis placed on social economic shows that retailers are most concerned with what many describe as the underlying cultural environment. Findings like this suggest that locating suitable suppliers may prove problematic anywhere, as indeed may the acquisitions of useful marketing information, while problems associated with cultural differences will take on perhaps hitherto unrecognised significance. It is important for a retailer to remember that a success in the home market does not mean success in the international market. Retailers should remember that people and countries around the world might be/are very different compared to their own home country (Ibid).
2.2 Choice of the International Market
In the following part of this literature chapter theories that are relevant to how clothing retail companies select their markets/markets are presented.
All countries are included from the start of the screening process. In the primary screening, which is the first step of the screening process, the company is looking at the general country factors and generic product-specific factors. This first step must rely mainly on secondary data. Some countries are rejected and others are prospective target markets/countries. In step two the market potential of the prospective countries are estimated. Among factors that the company actually researches size and potential of the national market can be found. Again some countries are rejected and others are considered to be higher market potential targets. The sales potential of the company in a specific market is estimated in the third step. By evaluating factors such as product comparison, competition, market and channel structure and final consumer the sales potential is estimated. From these higher market potential countries some countries are again rejected as not suitable target markets. The countries that are left after all the three steps are considered to be high sale markets/countries. The fourth and last step of the screening process is to look at each market segment. By rejecting some of these segments, other segments are selected as the optimal segment mix in the target market. For the last step of the process, the identification of segments in the target market, the need of primary data is increased (Czinkota, Ronkainen & Moffett, 1996). Figure 2.2 on the next page shows the screening process.
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Figure 2.2: The Screening Process in Target Market Choice
Source: (Czinkota, Ronkainen & Moffett, 1996 p.505).
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The following sectors will describe the screening process by explaining each of the four steps in detail.
2.2.1 Step one: Preliminary Screening
To avoid ignoring countries that offer good prospects for the company’s product, or spending too much time investigating countries that have poor prospects, Preliminary Screening is conducted. The exclusion of potentially profitable markets is more common than over- investigating countries with poor potential due to the prejudice and self-imposed constraints. To avoid making these two mistakes preliminary screening should include all countries, and it should be economically conducted using qualitative data that is available from former studies (Czinkota, Ronkainen & Moffett, 1996).
Country-specific factors, which includes factors that shows the market’s overall buying power such as population, gross national product in total per capita, total export and import of the country, and product-and industry specific factors are aspects that should be looked at when conducting preliminary screening (Czinkota, Ronkainen & Moffett, 1996)
2.2.2 Step two: Estimating Market Potential
Total market potential is according to (Czinkota, Ronkainen & Moffett, 1996 p. 506) “ The sales, is physical or monetary units, that might be available to all firms in an industry during a given period under a given level of industry marketing effort and given environmental conditions.”
It is important to assess the size of the existing market and forecast the size of the future markets. Because of lack of resources and primary data these factors are often studied through secondary data. Input-output analysis, demand pattern analysis, estimation by analogy, multiple-factor indexes and income elasticity of demand are the most common techniques used when making the study (Czinkota, Ronkainen &Moffett, 1996).
To forecast the patterns of growth and decline in manufacturing a demand pattern analysis is made. In the early stages of the growth, for example, manufacturing is concentrated to some light industry such as food and textile (Ibid).
The income elasticity of demand is described as the relationship between demand and economic progress as indicated by growth in income. The share of income the consumers spend to necessities is giving a picture of the market’s level of development and an estimation of how much money it is left for the consumers for purchase of other merchandizes (Ibid).
By using variables that correlate closely with the demand of the particular product the market potential is measured indirectly by using multiple factor analysis (Ibid).
Estimation by analogy is used when data for a certain market is not available. The market size in the country in question is estimated for a specific product. For example, by comparing disposable income, between the country and a comparison country a base for estimation has been made. This estimation can be used in conjunction with detailed market data available for the comparison country (Ibid).
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To be able to estimate market potential, input-output analysis is used, especially in the industrial sector. The structure of an economy is provided from input-output tables. The tables show the change in demand of another industry. The volumes demanded in various sectors can be estimated when the tables are used in combination with economic projection (Ibid).
The researcher can by using these various techniques create valuable insight, but caution should be used in interpreting the result. Because of the differences in culture and geographic traits of market, the data may be out-of-date, since the information is based on historical data (Ibid).
International marketers can use various survey techniques in addition to the quantitative secondary data collection methods. When marketing new technologies, surveys are believed to be most useful (Ibid).
2.2.3 Step three: Estimating Sales Potential
When the international marketer has gained an understanding of markets with the most suitable aspects, the company’s own possibilities in those markets are still unknown. Sales potential is only and indication that the firm can expect to get in the long run. To arrive at an estimated sale, the marketer needs to collect product and market specific data (Ibid).
The market data and the aspects of the product that has to be collected are the following:
Competition Strength, Likely reaction to entry Market Strength of barriers Consumer Ability and Willingness to buy Product Degree of relative advantage, Compatibility, Complexity, Triability, and Communicability
Channel Structure Access to retail level
It is important to have in mind that the marketer’s questions can never be entirely answered until the firm has made a commitment to enter the market and is operational. The sales potential is, for example, affected by the entry mode that the company chooses (Ibid).
2.2.4 Step four: Identifying Segments
To sell the same product to all the buyers in the market with the same strategy is impossible, something that a company has to realize. This is due to the fact that buyers around the world today are too many, needs and buying practices vary in larger sectors and that they are widely scattered. Also companies have a widely abilities to server the different business in the market which can very (Kotler & Armstrong, 1996) and (Czinkota, Ronkainen & Moffett, 1996).
To begin with, the company has to divide the market into segments. Segmentation in this case is based on customer characteristics, which are: Demographics, operating variables, purchasing approaches, situational factors, and personal characteristics (Ibid).
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Demographics Industry, Company size and Location
Operating variables Technology User/nonuser status and Customer capabilities Purchasing approaches Purchasing function, Power structure, Nature of existing relationship, General purchase policies, and Purchasing criteria Situational factors Urgency, Specific application and Size of order Personal characteristics Buyer-seller similarity, Attitudes toward risk and Loyalty
Some additional variables such as: geographic location, economic factors, political and legal factors and cultural factors should be taken in consideration by the company when segmenting on international basis. These variables can either be used alone or combined to the other variables mentioned above (Ibid).
Geographic location Countries are grouped by regions Economic factors Population income level or Overall level of economical development Political and legal factors Stability of government, Receptivity to foreign firms, Monetary regulations, and the amount of bureaucracy Cultural factors Language, Religion, Values and Attitudes, Customs and behavioral patterns
When these four variables are used for segmentation in the international market, companies see segments as group of countries. However, there are different approaches to segmentation, for example some companies use a different approach called Intermarket Segmentation. Intermarket segmentation is when the company puts countries with the similar buying preferences into one segment despite the fact that they do not live in the same countries (Ibid).
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2.3 International Market Entry Strategies for Retailing Companies
This section will present theories that are relevant when asking the question, what kind of strategies retailing companies use to enter the international market.
When manufactures want to become involved in international retailing they have several options of getting their product to the final consumers. As shown in figure 2.3 according to (Sternquist, 1998), there are four ways a manufacturer can choose to get the product to the final consumer. These four entering strategies are: Export, license, joint venture and wholly owned subsidiary.
Export: If a retailer wants to choose the lowest level of involvement then export is the main choice. By exporting products to new markets manufactures reduce their risk. But, their exposure to the market is also minimal, this means that the manufacture will not learn how to do business in that market. It is generally a distributor that takes care of the manufactures business in the foreign market. (Sternquist, 1998). The theory exporting is also mentioned by (Dawson, 1994).
License: When a company allows another company to produce their product under that company’s name, licensing is in action. Here it is the manufacturer that is responsible for the product. Manufacturers in this case places themselves at a risk of losing the control of product quality and distribution in the foreign market. Both licensing and exporting have small financial risks (Ibid).
Joint Venture: Joint venture is cultivated when two companies go together to form a new business unit. This form of international approach requires the company to have great knowledge about the new market (Ibid).
Wholly Owned Subsidiary: Wholly owned subsidiary is the manufactures own business in the foreign market. This means that everything from production to selling takes place in the foreign market (Ibid).
(Sternquist, 1998) also argues that retailers have different ways of going internationally. The retailer can use two ways to approach the international market, either by licensing or franchising:
• Licensing: The licensing settlement is like the one in manufacturing. Here the retailer allows a foreign company to use the licensing company’s name. A negative fact with this strategy is that the retailer in this case must sacrifice control, which is not unusual in retailing. • Franchising: In a franchise agreement the retailer gives imitators the right to use the retailer’s name. The retailer also provides the franchiser with education and training needed to make the business work. However, (Doherty, 2001) argue that this strategy is good if a retailer wants a short-term profitability. To start a franchise business requires much consideration due to the fact that it will stop the chance for expansion in the future. Moreover, (Doherty, 2001) explains that franchising is the easiest way for a company to expand itself. According to her, it is better for a company to take advantage of the already existing knowledge that is available in the target market which will make it easier for them, in term of time and money which the company otherwise had to put down on
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research to find the same information. Example of franchise companies are McDonald’s, The Body Shop and Bentton (Sternquvist, 1998).
(Dawson, 1994) concludes that when patents can easily be defined and established than licensing is used and when knowledge is difficult to codify, then direct investment is more likely to be applied. Within the retail context this would suggest that franchise type internationalization will be used when stores formats can be well defined, and protected in some way. Examples of companies that have succeeded with this kind of strategy are The Body Shop and Benetton. However, there are many examples of well-defined formats that have been internationalized by direct investment such as Aldi, Perfumeries Douglas and the Gap. Although the format is well defined it is not easily protected from being copied. However, there are some exceptions like IKEA and Hennes and Mauritz, where control is affected through the strong retailer branding of products.
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Figure 2.3: Internationalization Choices
Source: Adapted from: (Sternquist, 1998) p. 9
Retailers sell products to the ultimate user; this means that they need to be located where the ultimate consumers/users are geographically. This is why it is important for the retailer to have physical presence in the market; does not have to be through a store, but could also be through out medium, such as a catalogue. The elements of culture are more important variable for a retailer than for a manufacture. When it comes to internationalization efforts retailer end up far behind manufactures. A study made recently showed that out of 100 retail companies in the world, only 56 operated outside their home market. Out of those 56 companies only five retailers procreated more then 50 % of their sales in foreign markets. One example of such company is the Swedish home furnishing company IKEA that has moved into 18 countries and generates the largest proportion of income, which is, and impressive 89 % from its global operation. (Sternqvist, 1998). Another Swedish retail company that has succeeded very well the last years in international retailing is H&M (Hennes & Mauritz). H&M sales outside Sweden stands for 88 % of the companies total revenue. (www.hm.com)
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2.4 Expansion Strategies of Retailing Firms
According to (Sternquvist, 1998) there are four types of retail firms which all of them ponder international expansion. These are: the strong, the weak, the unique and the standard.
The strong: When worldwide distribution is the goal of well-established companies they often aim at international market. Although the company understands that it will have strong competition, they also realize that if they do not take their retail format into the international arena, imitators in the home market will copy it and thereby kill their chances of international growth in the future.
The weak: If a company cannot maintain a market share in the home market it does not have any other choice then to enter the international market to avoid heavy competition (Sternquvist, 1998). However, (Akehurst, Alexander, 1995) argue that if a company cannot maintain a market share in the home market, it is not likely for the company to make it on the international market.
The Unique: The only companies that have the abundance of expansion alternatives are the “unique” companies. These companies often use their exact replication of their standard product form. Despite the fact these companies have the chance to both expand in less developed and developed companies, they choose to put more emphasis into the developed countries.
The standard: To capitalize their larger-scale format is the standard companies reason to enter the international market. These retailers use a professional technical training, which means that they train sales employees to provide higher level of service. A situation where land and labour is inexpensive suits these companies’ stores emplacements. It is important for a standard company to locate countries where the consumers´ accessible income is increasing. Usually these companies move from more developed countries to a less developed counties.
Figure2.4 shows the four types of retail companies and their choice of where to expand. As you can see the strong and the unique companies can choose to expand in both developed and less developed countries, while the weak and the standard companies only have one choice, to enter the less developed counties.
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Figure 2.4: Types Of Retail Companies
Source: Adapted from: (Sternquist, 1998) p. 15
2.4.1 Ability to Change in Retailing
This section will give you an overview of why it is of great importance for retailing companies/a retailer to be able to change and make the changes in their way of doing business to be able to survive the heavy competition.
According to Morgenstein, Stoning, (1992), there is one capability that all retailers should have and that is the accommodation of change. Retailers are greatly affected by the current situations in the home country. To be able to change is a necessary factor for a retailer to survive since it is important for them to be able to adapt themselves in the social, political and economic environment. The constant change that occurs in retailing can be explained by Malcolm P. McNair´s model the Wheel of retailing. As seen in figure 2.5 every new change is shown as a turning wheel. Often there is not much to offer for new retailers that enter the market since they do not have the strength and the service that all the already existing retailers have. They also compete with high-priced retailers. These new retailers are called low margin operators. The new retailers are often having the lower prices to attract customers, which of course affect the entire retail market. After a while when the new retailers have become established on the market new retailers will enter the market and copy their retail strategy. When the competition gets additional the establish retailers start to renew their ways of doing business (changing product, location and price etc). A renewing process is not free, it costs a lot of money, which leads to that their margins, and their development will decrease. When the new retailers reach the maturity stage they will open up for newer challenges and to new low priced operations. At this level the cycle (wheel) comes to an end. The cycle is now ready for another turn and because of this a new cycle starts.
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Figure 2.5: The Wheel Of Retailing
Source: Adapted from: (Morgenstein, Stoning, 1992) p. 38
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2.5 Conceptual Framework
Conceptualization
According to Miles and (Hubemrman, 1994) a conceptual framework explains, either graphically or in a narrative form the main things to be studied. It decides which variables that are most important, and what information that should be collected and analysed. By conceptualising the reviews literature into a framework, it will work as a base when collecting and analysing the data needed to answer the research questions.
Research Question One – Why do clothing retail companies choose to enter a foreign market?
Research question one can be described, explored and explained by implication of the following theories:
• To Internationalize with proactive and reactive motivations by (Czinkota &Ronkainen, 1998)
• (Braker, Walker & Walker, 1995) External forces affecting the increased internationalizations.
Research Question Two - How do clothing retail companies select their foreign markets?
The following theories have been used for the how to select a international market/markets:
• Primary Screening: (Czinkota, Ronkainen & Moffett, 1996) • Estimating market Potential: (Czinkota & Ronkainen & Moffett, 1996) • Estimating sales potential: (Czinkota & Ronkainen & Moffett, 1996) • Identifying Segment: Kottler & Armstrong, (1996) and (Czinkota, Ronkainen & Moffett, 1996)
To explain what international retailing is the following theories from (Williams,
1992) and (Sternquist, 1998) have been used.
The next interesting accepts of retailing is why fashion retailing is successful, which has been explained with the help of (Doherty, 2001) and (Dawson, 1994).
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When explaining the reason why clothing retail companies choose to internationalize in the international arena the following theories has been used:
• The desire to export and saturation: (Alexanders, 2001) • Factors influencing the internationalization of retailing: (Williams, 1992) • Factors influencing the internationalization of retailing: (Dawson, 1994) • Market, home market low growth potential: (Sternquist, (1998) • Need to diversify investment: (Sternquist, 1998) • Expansion at home blocked by legislation: (Sternquist, 1998) • Possession of a unique market form: (Sternquist, 1998) • Intense competition at home: (Sternquist, 1998) • Economic downturn at home: (Sternquist, 1998) • First-mover advantage: (Sternquist, 1998)
When explaining the problems with expansion internationally the work of (Alexanders, 2001) has been used.
To be able to answer, explain, describe and explore question 3, how do clothing retail companies choose their entry into foreign markets? and research question 4, how could expansion strategies of clothing retail companies in foreign markets be described? The following theories have been used:
Export: (Sternquist, 1998) and (Dawson, 1994) Licensing: (Doherty, 2001) Joint Venture: (Sternquist, 1998) Wholly owned subsidiary: (Sternquist, 1998) Licensing/Franchising: (Sternquist, 1998), (Doherty, 2001) and (Dawson, 1994)
When explaining the expansion of retailing firms into the international arena the work of (Stenquist, 1998) and (Akehurst, Alexander, 1995) has been used.
The importance and ability of change has been explained with help of (Morgenstein, Stoning, 1992) theory, The wheel of retailing.
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3. Methodology
In this chapter will present the methodology of the study and in each section methodological choices regarding the research will be discussed and justified. This chapter withholds the purpose of the research, research strategy, data collection methods, sample selection and analytical strategy. Additionally, this chapter will end with a discussion about reliability and validity of the study.
3.1 Research Purpose
According to (Wiedersheim-Paul & Eriksson, 1998) and (Yin, 1994) there are three different types of research purposes namely exploratory, descriptive and explanatory.
The purpose of exploratory research is to explain unclear problems and to each a better understanding about the character of the problem. Descriptive researcher’s purpose is to provide a description of various characteristics of a phenomenon or population. (Zinkmund, 2000) If the research is explanatory, the purpose is to answer questions by using cause and effect relationship (Aker, Kumar & Day, 1998)
Since the purpose of this study is to describe the process of internationalization of retailing in the clothing industry, makes the research descriptive. Considering the shortage of research in this area, it may also be classified as- to some extent- exploratory.
3.2 Research Approach
According to (Wiedersheim-Paul & Eriksson, 1998) and (Yin, 1994) there are two kinds of research approaches qualitative and quantitative.
The aim of qualitative method is to construe and understand phenomena by asking the questions whom, how and why. Moreover, the answers are usually in word or sentences (Nyberg, 2000). According to (Holme & Solvang, 1997) the focus of qualitative methods is not to give the information a general approach but rather to gain a deeper understanding of the problem.
The general objectives of qualitative research is to evaluate and explain, and questions frequently asked is how much, many often or to what extent? Often, the answers can be measured, calculated or revised with statistical methods (Nyberg, 2000) and because of this, the focus of quantitative research is on numbers and figures rather than words (Zikmund, 2000). In general, quantitative methods are structured, dignified and characterized by the great coverage of control that researcher often has. As a contradictory of qualitative methods, quantitative methods often argue a problem from a broader and more common perspective (Holme & Solvang, 1997).
The purpose of this study is to describe the process of internationalization of retailing in the clothing industry. Therefore, a qualitative approach has been used by doing a single case study. A qualitative approach was the most suitable for this study since the answers cannot be quantified and measured in figures.
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3.3 Research Strategy
According to (Wiedersheim-Paul & Eriksson, 1998) and (Yin, 1994) there are five primary research strategies namely experiments, surveys, archival analysis, histories and case studies. According to (Yin, 1994) what strategy to use in research could be appointed by looking at the three following conditions:
• The type of research question posed • The extent of control an investigator has over actual behavioral events • The degree of focus on contemporary as opposed to historical events
Ass seen in Table 3.1 each of the conditions is related to the five research strategies.
Table 3.1: Relevant Situations for Different Research Strategies
Research Form of Requires Control over Focuses on StrategyRrr Research Questions Behaivioural Events Contemporary
Experiment how, why yes yes
who, what, where, how Survey many, how much no no
Archival who, what, where, how no yes/no Analysis many, how much
History how, why no no
Case Study how, why no yes
Source: (Yin 1994, P.6)
Since the purpose of this study is to describe the process of internationalization of retailing in the clothing industry the focus is on contemporary events, control over behavioral events is not required and, experiment or history strategies are not appropriate for this study.
Archival analyses, as well as surveys, are beneficial strategies to use if the objective of research is to describe the occurrence or prevalence of a phenomenon or when certain outcomes are prognostic (Ibid). Since that is not what this study aims to do and due to the limited time, these strategies are not proper for this study. By taking all of the facts mentioned above in deliberation, the most suitable strategy for this study is a case study, which is why this research strategy is used.
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3.3.1 Case Study Design
A case study is “an empirical inquiry that investigates a contemporary phenomenon within its real-life context” and covers contextual conditions, rather than single phenomenon according to (Yin, 1994, p.13). Moreover, case studies can be guided by, and advantage from, former theories in the collection of data and analysis, and should entail multiple sources of evidence. A case study involves according to (Wiedersheim-Paul & Eriksson, 1998) research about a small number of objects in many aspects and therefore demands access to wide data about the research problem.
(Yin, 1994) state that case studies can be divided into single and multiple- case studies. A single case study can be compared with a single experiment and likewise, a multiple case study is comparable to multiple experiments. According to (Yin. 1994), there are three major reasons for conducting a single case are, if the case: presents a critical test of existing theory, is a rare or unique event or serves a revelatory purpose. An important factor to consider is the weakness of the single case design and therefore a careful study of the potential case is needed in order to make the most of the evidence and reduce the chances of misconception (Ibid).
There is certain distinctive compensation to use multiple-case studies rather than single ones, since multiple cases are often considered more vigorous. However, a weakness might be that multiple cases often fall short to satisfy the main reason for conducting a single case (Ibid).
Since the researcher’s aim is to obtain in depth information and understanding about the process of internationalization of retailing in the clothing industry a single case study is used to reach the purpose.
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3.4 Data Collection Method
According to Yin, (1994) there are six sources of evidence to rely on when collecting data for case studies: documentation, archival records, interviews, direct observation, participant observation and physical artifacts. No single source of evidence has a complete advantage over the other, but the sources complement each other. Table 3.2 on explains each source and show strength and weaknesses of each.
Table 3.2: Six Sources of Evidence: Strength and weaknesses
Source of Evidence Strengths Weaknesses
Documentation • Stable-can be reviewed • Retrievability-can be low Repeatedly • Biased selectivity, if collection • Unobtrusive-not created as a incomplete result of the case study • Reporting bias-reflects (unknown) • Exact-contains exact names, bias of author references, and details of an event • Access-may be deliberately • Broad coverage-long span of blocked time, many events, and many settings
Archival Records • Same as above for • Same as above for documentation documentation • Precise and quantitative • Accessibility due to privacy reasons
Interviews • Targeted-focuses directly on case • Bias due to poorly constructed study topic questions • Insightful-provides perceived • Response bias causal inferences • Inaccuracies due to poor recall • Reflexivity-interviewee gives what interviewer wants to hear
Direct • Reality-covers events in real time • Time-consuming Observations • Contextual-covers context of • Selectivity-unless broad coverage event • Reflexivity-even may proceed differently because it is being observed
Participant • Same as above for direct • Same as above for direct Observations observations observations • Insightful into interpersonal • Bias due to investigator’s behavior and motives manipulation of events
Physical Artifacts • Insightful into cultural features • Selectivity • Insightful into technical • Availability operations
Source: (Yin 1994, P.80)
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Due to the fact that this thesis is qualitative, archival record could not be used as a source of evidence. Furthermore, direct observations and participant observations are eliminated as a source of evidence because of the time limitation and financial resources. Since the researcher in this case dose not need to look at technical operations or cultural features he chose not to use physical artifacts as a source of evidence. This limits the researcher to two sources of evidence, namely: interviews and documentation that will be use in this study.
(Yin, 1994) sate that interviews are on of the most important sources of evidence when conducting case studies. There are three are different kind of interviews and (Yin, 1994) classifies them in three categories namely: open-ended nature focused and survey interviews. In open-ended interviews the investigators can ask key respondent about facts as well as opinions about definite matter. A focus interview is used when a respondent is interviewed for a short period of time and is most likely to follow a certain set of questions. Moreover, formal surveys entail that interview questions are prepared.
(Wiedersheim-Paul & Eriksson, 1998) state that there are three different ways that can be used when conducting interviews namely: personal or telephone interviews and questionnaires. The type of interview that was used in this study was a telephone interview. Since the respondent was not locally situated and the information the researcher needed had been difficult to obtain by using a questionnaire. The type of interview used in this study was telephone interview. The telephone interview gave the researcher the chance to be able to gather comprehensive information, since he could explain the questions asked in order for the respondent to understand them in detail. The interview lasted for roughly one hour and the questions asked where developed from the theories reviewed in the literature chapter through the conceptual framework. The researcher used an interview guide as a base for the interview and follow up questions where asked during the interview.
3.4.1 Primary and Secondary Data
According to (Wiedersheim-Paul & Eriksson, 1998) and (Yin, 1994) there are two ways of collecting data: Primary and secondary data. Primary data are collected for a specific research in response to a specific problem, whereas secondary data has already been collected for another purpose.
For this study both primary and secondary data have been used. Primary data was collected through the telephone interviews that the researcher has done with the company. The secondary data was collected from the company’s website in order to gain a better understanding about the company. Information from academic articles, books and reports were also used as secondary data.
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3.5 Sample Selection
According to Yin, (1994) collect data from all potential units is impossible because of the time limitation and the limited financial resources. To be able to describe the relevant distinctive features of the entire problem area, smaller samples are gathered. The Investigator can not be certain that the conclusion he/she will end up with will be able to generalize the whole research are since the samples chosen are not all together representative of the research area from which they are gathered.
In this thesis the sample selection is limited to only one company namely Dressmann. The chosen company was selected because of, the researcher’s, knowledge through the media that Dressmann exist in many countries and that fact that the company is well known. The researcher has also by first hand experience seen that the investigated company has stores around the world. Consequently this company was chosen with regard to the purpose and research questions of this study.
3.6 Data Analysis
Yin, (1994) state that when analyzing data, the goal is to discuss the evidence gathered fairly to be able to draw conclusions and to rule out alternative interpretations. Data analysis means to make descriptive statement from a series of recorded observations. Before analyzing the actual data, the researchers have to choose between two general analytic strategies, relying on theoretical propositions and developing a case description. In this study the frame of reference formed by selection of appropriate theories was used for data analysis.
3.7 Quality Standards: Validity and Reliability
3.7.1 Reliability
According to (Zinkmund, 2000, p.280) reliability is”the degree to which measures are free from error and therefore yield consistent result”, and is therefore concerned with the credibility of a research. High reliability implies that despite of researchers, time and situation, similar results are obtained and low reliability can be caused by misinterpretations or if respondent misunderstands questions (Zikmund, 2000).
Specific methods have been taken in order to enhance the reliability of this study. To begin with the researcher laid exertion in developing research questions to alleviate the research. Secondly, this chapter gives an overview about the methods used when gathering data for this study. Furthermore, the respondent was educated about the topic far in advance and sent the interview to the respondent prior to the interview. This allowed the respondent to organize himself for the following interview and therefore provide the researcher with correct answers. The respondent was allowed during the interview to speak feely about the topic. Since the mother tongue of the respondent was Swedish, the interview was done in Swedish. The use of Swedish during the interview decreased the risk of for misunderstanding; nevertheless, since the interview has been translated into English, the reliability may be affected.
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According to (Wiedersheim-Paul & Eriksson, 1998) the most significant reason of measurement instrument is validity, which, is the capability of a measurement instrument to measure what it was supposed to measure. It is stated by (Aaker et al., 1998) that validity is therefore apprehensive with the quality of a research and when judging the quality of a case study, three different tests to be used are recommended by (Yin. 1994) namely: construct validity, internal validity and external validity. The description and tactics of each test is summarized in table 3.3.
Table 3.3: Case Study Tactics for Four Design Tests
Tests Case study tactic Phase of research in which tactic occurs - Use multiple sources of data collection evidence
Construct validity - Establish chain of data collection evidence composition - Have key informants review draft case study report - Do pattern-matching data analysis
Internal validity - Do explanation-building data analysis
-Do time-series analysis data analysis
- Use replication logic in research design External validity multiple-case studies
- Use case study Protocol data collection Reliability - Develop case study data data collection base
Source: Adapted from (Yin, 1994, p.33)
33 Methodology
3.7.2 Validity
In order to enhance the construct validity, multiple sources have been used; the sources used to collect data were documentation and interview. A tape recorder was used throughout the interview in order for the researcher to go back to check on what was said. It also ensured the researcher that no data was wasted and allowed the interviewer to focus on the interview. One more facet that increased the construct validity of this study is the fact that the data gathered from the interview was sent to the respondent for evaluation. This helped the researcher to elucidate that the information was interpreted accurately. The researcher was ensured that the most suitable respondent was selected for the interview, since the respondent was head of finance for Dressmann, Sweden. Though, since the interview guide was sent to the respondent before the interview, the respondent might have been subjective and the construct validity of this study may as a result of this been affected.
External validity is concerned with the problem of knowing whether the findings of a case study can be generalized or not according to Yin, (1994). Since this is a single-case study, the external validity cannot be measured high.
34 Empirical Data
4. Empirical Data
This chapter provides the empirical data that has been collected through an interview with Mr. Lars Hansson, head of finances for Dressmann, Sweden. Furthermore, additional data has been collected from the Internet on the website of Dressmann. The chapter begins with a presentation of Dressmann, which will be followed by relevant data to each research question.
4.1 Company Background
Dressmann is part of a huge retailing company called the Vaner Group. The company was founded by Frank Vaner who opened his first clothing store in 1962 in Oslo, Norway. He started by selling men’s clothing only. Today the Vaner Group is owned by Frank’s sons, the Vaner brothers. The Vaner Group today consists of eight clothing chain stores – Dressmann, Cubus, Bik Bok, Carlings, Vivikes, Varner, Wear house and Le Battre (www.dressmann.se). In 2004 the Vaner Group had a turnover of 6,2 billion SEK where half of it came from the clothing chain store Dressmann. The Vaner Group have since the middle of the 1990´s extended their business all around Europe and are today the largest clothing retailing company in the northern part of Europe. Besides the stores in Sweden and Norway stores can be found in Finland, Iceland, Denmark, Germany and Estonia (Veckans Affärer). The company’s central administration office is located in Billingstad outside Oslo, Norway, and one main office for each foreign market they established in is built in that particular market. By 2004 Dressmann hopes to open its 200th store in Sweden. Most of Dressmann´s stores are today located in Norway, and Norway is still the company’s most profitable market.
4.2 Dressmann goes International
According to Mr. Hansson – the head of the financial department for Dressmann, Sweden – the company’s reason to expand was in the beginning the saturated market in Norway. Mr. Hansson further explains that later the company realized that an expansion could make them gain better profits. Another reason for the company to expand internationally was the fact that Dressmann had and still has unique products to offer it customers. However, Mr. Hansson pointed out that the company’s decision to expand did not have much to do with economies of scale since the difference is not much between the home market and Dressmann´s other markets. Furthermore, the respondent points out that still it was a reason for them to internationalize. Another important factor for the company’s desire to enter the international arena, was exporting. Mr. Hansson points out that since the Dressmann has a unique business concept and product it would be pity not to share it with other markets. Thus possession of a unique product .Further, he explains that Dressmann´s expansion to some of their international markets like Sweden, Finland and Denmark, was because of the geographical proximity, which had a great value for the company’s expansion. The fear of losing the domestic markets share to other international competitors was another reason for the company to enter the international arena.
35 Empirical Data
Mr. Hansson explains that Sweden was the first country outside Norway that the company started their expansion to. After a few years in Sweden the next country to enter was Finland. Finland was a natural choice because of its geographic location. However, according to Mr. Hansson there are some countries where the expansion of the company has been difficult. Mr. Hansson points out that throughout the years Dressmann have faced many external factors affecting the company’s internationalization. He further explains that today’s technology has made it easier to do business and in Dressmann´s case it has given the company more flexibility to manufacture and distribute their products. Mr. Hansson adds that the retailing industry today is a very competitive environment and that more and more companies are being brought up by one another. Strategic alliances are today more common than they where before and this is a good sign of the heavy competition that exist on the international market today according to Mr. Hansson. Mr. Hansson further explains that there are some heavy competition in the company’s home market and that instead of merging with other companies at an international level, Dressmann sees the competition as a force for them to develop and come up with new and unique products that are better than the competitors. All the competition that Dressmann faces is very good for the company’s development according to Mr. Hansson.
Another external fact that affects Dressmann is governmental policies. Although more and more barriers and trading blocks are lost, Mr. Hansson explains that one of the countries the company had a little problem with was Denmark where the market already had a Danish clothing chain store with five stores around Denmark selling men’s clothing with the exact same name, Dressmann. In Denmark the company had to buy the rights for the name and also buy the Danish men’s clothing chain store.
The issue of cost is a factor that Dressmann considers to be very important according Mr. Hansson. He further clarifies that when the company started to go international it had to order larger amounts of merchandize which made the companies cost decline a bit. When is it comes to distribution channels Mr. Hansson explains that Dressmann has been very lucky since they have managed to use the already existing ones, especially when it comes to the Nordic countries. An exception is however Germany where the company had to build new working distribution channels.
Mr. Hansson explains that since he started to work at Dressmann Sweden, he has seen changes in the market demand. He points out that customers in Sweden value price, quality, service etc very much like their customers in Norway or other markets do. This means that the demands are becoming more and more homogenous all around the world according to Mr. Hansson.
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4.3 Choice of the International market
When Dressmann chooses its foreign markets, the company usually follows four steps. In each step, one or more markets will be eliminated.
Step one: Preliminary Screening
The company makes an overview of all the potential countries they can choose from. Factors like exporting and importing, gross national product per capita and product-and industry specific factors are some of the things that the company takes into consideration.
Step two: Estimating Market Potential
Mr. Hansson explains that when choosing new markets it is important for the company to look at its existing markets and its size. The market size in a new market is estimated for a specific product, in Dressmann’s case men’s clothing. Since the primary data does not give the company all the information it needs about the new market, a secondary data conduction must be made to give Dressmann the required information needed to be able to estimate the market potential of the new market. The secondary data is gathered through an input-output analysis, demand patterns in that market and the market’s income elasticity. According to Mr. Hansson, Dressmann uses the input-output analysis to be able to see the structure of the economy in that specific market. However, Mr. Hansson points out that it is important to remember that the data gathered from the input-output analysis is not always reliable since the data can be out of date because of the simple fact that it is secondary data based on historical data. The demand pattern analysis is made to be able to see the growth and decline in manufacturing sector. Further Mr. Hansson explains that the market’s income elasticity is the most important information for the company since it shows Dressmann the connection between demand and economic progress as indicated by growth in income.
Step three: Estimating Sales Potential
In the third step Dressmann looks at the sales potential in the countries that they have chosen when finishing step one and two. According to Mr. Hansson, by looking at the sales potential in the remaining countries the company can only estimate the kind of sales Dressmann can anticipate in the future in those specific markets. However, Mr. Hansson explains that it is important to have in mind that despite the numbers that Dressmann gets from the sales potential estimation, the company can never be sure how it goes until they actually enter the new market and what kind of entry mode that is chosen. Estimating sales potential is made by looking at five different categories in the potential market according to the respondent; competition, market, consumer, product and a very important factor for the company – the channel structure. Mr. Hansson explains that in some countries, for example Germany, the company has been forced to put in massive resources to be able to receive a working distribution channel; everything had to be made from scratch. In the companies other international markets that often are close to each other, the same logistic channels are used to get the products to their final destination. Mr. Hansson further explains that for example to get the company’s products to Denmark, Sweden and Finland the same logistics units are used.
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Step four: Identifying Segments
The last step of the screening process is identifying segments. Mr. Hansson explains that for a company like Dressmann, segmentation means great deal since the company sells a wide range of products. Today Dressmann´s main segment consists of men between the ages of 30- 50 years old. The company has an age-oriented segmentation, which is only for men since Dressmann only sells men’s clothing. However, Dressmann also has secondary segments, which are men between the ages of 20-70 years old. Usually the company divides the market into different segments based on customer distinctiveness. Apart from this, geographic location, cultural factors, economic factors and political and legal factors are taken in to consideration. Mr. Hansson explains that so far all their markets have been very similar to each other and that the company usually chooses markets close to the home market. However, Mr. Hansson points out that Dressmann does not try to choose a specific segment for their products since the company tries to reach a multitude range of customers.
4.4 Challenges of Internationalization
Mr. Hansson believes that Dressmann´s success in fashion retailing lies in the fact that the company is private owned, it is a family company. He further explains that in the Nordic countries, especially Sweden and Norway, all the retail companies have been very strong in their line of business. The competition in their home markets has been very intense and this has made them to go international and develop their products more and to think in a wider perspective. Another reason for the success in fashion retailing is according to Mr. Hansson the fact that he believes that fashion relating chain companies are more likely to be successful than other companies. An important factor is that a company’s brand can make it possible to succeed internationally. He explains that if a company delivers good products with a good price then it is likely for that company to make it both nationally and internationally.
One of the main factors for Dressmann´s success is the fact that they have a business concept that suits many countries according to Mr. Hansson. He further explains that the countries, in which the company has established itself, are culturally very close to the home market, which is an important device for success. There are many factors for a retailing company to invest in a new market according to Mr. Hansson. He further states that one of the reasons for Dressmann´s internationalization was the saturated home market and the company’s desire to export. Other reasons for the company’s decision to enter the international arena was the fact that they had a potential to fill niches in other markets and the fact that the growth potential was getting low in the company’s home market. However, Mr. Hansson explains that for some of their markets like Latvia, the market was chosen since it’s not explored and that it would take a long time for a competitor to get established. Until today Dressmann is the leading foreign clothing retailing companies in Latvia. Mr. Hansson also pointed out that a factor for a retailing company’s success is its location in its existing markets. Without a good store location he explains that Dressmann wouldn’t have been as successful as they are today. Mr. Hansson explains that when a fashion retailing company like Dressmann goes international, the company gains much profit in term of economies of scale. This is due to the fact that when the company makes its purchases it can order a bigger purchase volume, which gives the company the ability to pressure down the supplier costs. Another reason to internationalize was to obtain higher profits according to Mr. Hansson. Location is a very important reason for internationalization according to Mr. Hansson. He further explains that sometimes it is very important to be first in the market while the best locations are still available. He also points out that until today Dressmann has always had the best location in
38 Empirical Data their existing markets which in this case means that the stores are very centrally located in all their markets. The last reason for Dressmann to enter the international arena was the opportunity for the management to get hold of new ideas and technology that could be implemented at the home market.
The main problem when entering the international arena is according to Mr. Hansson to find people you can work with. The further from your home the market you get is, the harder it is to find “the right” people to work with. It is important for Dressmann that their employees give a correct picture of the company. Another problem is the lack of knowledge about the new market. Mr. Hansson explains that despite the fact that they have gathered data about the new market, it still is a struggle in every way to get to know it. Although Dressmann chooses to enter markets similar to their home market, there are still some problems in terms of cultural differences. Mr. Hansson points out that some adaptations are made in every market but until now those adaptations have been marginal. But in markets that differs slightly from the company’s home market, adaptation of products are made to suite that particular market. However, Mr. Hansson points out that the product adaptation is not as dramatic as it sounds like. He further explains the differences between Norway and Sweden as an example. The Swedish people have today a more casual clothing style than the Norwegians at their work place. In Sweden more “trendy” clothing like jeans, T-shirt and shirts are used while in Norway they have more “classic” clothing taste with suits and jackets etc. With this information the company adapts its products to each market. More suits and jackets are ordered to Norway than Sweden.
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4.5 Dressmanns´s Entry and Expansion in Foreign Markets
Dressmann´s strategy to enter the international arena is according to Mr. Hansson by opening wholly owned subsidiaries. A wholly owned subsidiary allows the company to do business in their own way. Everything from manufacturing to selling the actual product takes place in the foreign market and is entirely owned by the company itself. Once again he point out that the company is privately owned by the Vaner brothers and that all the decision and changes are made and discussed at the company’s headcounters, which is outside Oslo, Norway. From the headcounters, the information travels further to the head offices in the company’s foreign markets where it is tailed to suite that particular market. However, Mr. Hansson admits that the first time the company considered internationalization it happened through exporting. Mr. Hansson points out that although exporting does not give the company much information about how the business should be made in that market, it gives them a clue of how the new market reacts to their products and if there is any chance to succeed in that market. In other words a combination of direct exporting and establishing wholly owned subsidiaries is used. He further explains that Dressmann has been very lucky in choosing markets and that is because of the great market researchers the company has at its marketing department.
When entering a new market it is hard for the new employees to understand the “way that business is done”. This is why the company when entering a new market always gets people who have worked in the group for a while to move to the new market and train and “school” the new management and the employees of that particular market. When the way of Dressmann´s “making business” is clear in the new market the experienced employees will move back home to their original locations. According to Mr. Hansson this is one of the main reasons why Dressmann is so successful on the international arena.
According to the respondent, Dressmann is a company that has a strong competition but the competition is not something that they are afraid of. Mr. Hansson further points out that if the company hadn’t believed that they would make it internationally they would never have expanded from the Norwegian market. But, the market in Norway was saturated and the company had to go international to stop imitators in the home market to copy them and kill their chance of an international growth. The exceptional concept of Dressmann is according to the respondent the fact that the company uses its exact reproduction of their standard products also on the international arena. No distinctions are made between developed and developing countries. Although Mr. Hansson admits that some of their markets have been less developed countries like for example Latvia. However, until this day the expansion has been more successful in developed countries than in developing countries according to the respondent.
Although Dressmann uses its exact reproduction of their standard products it is important when entering a new market to take into consideration and to be able to adapt to the many different aspects and differences that exist in the new market. In Dressmann´s case, the company always follows the trend of the fashion and sells products that are modern and demanded on the market. He further explains that since Dressmann is a fashion retailing company, it is important to always follow the fashion and the changes, which are made. He goes on by explaining that fashion is one of the, if not the most flexible, environment that one can work in and it is important to notice the trends. Another reason for Dressmann’s success is according to Mr. Hansson Dressmann´s designers ability to always be “in line with fashion”. As long as Dressmann follows the trend of the market, no competitor can beat our company. Mr. Hansson points out that competition is not a negative factor, it gives the
40 Empirical Data company the chance to develop and come up with new ideas and ways of making business. This is something that Dressmann has been used to after a decade in the retailing industry.
41 Analysis
5. Analysis
This chapter includes an analysis of data collected through the interview which was presented in the previous chapter. In order to analyze the data, the literature presented in the frame of reference will be used. Since this is a single-case study, a within case analysis will be carried. Initially, this chapter will present an analysis of the data concerned with the first research question, which will then be fallowed by an analysis of data gathered regarding the second and the third research question.
Within Case analysis: Dressmann
5.1. Internationalization of Dressmann
The reason for Dressmann to enter the international arena was in the beginning the saturated market in Norway. However, there have been several other factors involved when it comes to the company’s internationalizations decision. The desire to gain better profits and the unique business concept of Dressmann are two other reasons to mention. The internationalization to the Nordic countries, Sweden, Finland and Denmark was mainly made because of the countries´ physical closeness to the home market. Another important fact for Dressmann´s internationalization was its desire to export as a way to gain credibility.
According to (Czinkota, Ronkainen and Moffett 1996) and (Czinkota, Ronkaeinen, 1998), there are two types of motivations that drive a company to the international arena, proactive and reactive motivation. In the proactive motivation four factors can be identified namely: to gain better profits, a unique product or service, exporting and to seek economies of scale. The reactive motivation also withholds four factors, which are: competitive pressure, the fear of losing the domestic market shares to foreign companies, excess capacity and physical closeness. It has been identified that as proactive motivation Dressmann uses all the factors mentioned above while as reactive motivation we observe two out of four factors are used namely: physical closeness and the fear of losing the domestic market shares to foreign companies.
External factors affecting the internationalization
Competition is something that Dressmann noticed both in their home market but also at international level. Although the company sees competition as a tool for them to get better and develop, the fact remains that Dressmann is in constant struggle to be able to keep itself in the position that the company holds at the retailing market today. The fact that demands around the world are becoming more and more similar is also very strongly recognized by the company. Despite the cultural differences that exist from one market to another, people around the world have today a more homogeneous demand than before.
42 Analysis
Since Dressmann is effective in the retailing industry, the company has noticed very visible changes in technology. Compared to a decade ago differences in distribution, deliveries, manufacturing and orders etc has become easier to handle. Despite the fact that more and more barriers and trading blocks are lost today, in some markets Dressmann have had problems when establishing the company’s brand. For example in Denmark the company had to buy an already existing clothing chain store with the exact same name to be able to enter the Danish market. In other markets like Germany, the company had to do everything from scratch from building a working logistics channels to getting permission to start a business in that country. All this indicate that Dressmann´s internationalization have been affected by a set of external forces.
Braker, Walker & Walker (1995) state that companies have no choice and must sometimes move towards a more global market. The most common factors that are driving the companies to an international expansion are the external forces. The external forces are grouped in five groups namely: cost, technological advance, competitive environment, governmental policies and market force. It has been acknowledged that Dressmann is affected by four out of the five of these forces namely; technological advance, competitive environment, governmental policies and market force.
At Dressmann the success in fashion retailing lies in the fact that the company is privately owned. Retailing companies in the Nordic companies in general have been very successful in their line of business. Another factor that has made Dressmann on of the leading fashion retailing companies on the market is the competition. Competition has made the company stronger in terms of coming up with new products and development of new ideas. However, Dressmann believes that the most important factor for their success lies in the name of the company, the company brand which stands for good quality, reasonable prices and good service.
Fashion retailing has proven itself to be among the most profitable businesses among international retailers according to Dawson, (1994) and Doherty, (2001). Today, one third of all the international retailing companies are active in the fashion-retailing sector. According to these two authors the following factors that have made fashion retailing a success: small format requiring limited capitals and management set up costs, ease of entry and exit compared to manufacturing, single brand format enables internationalization, more suited to franchising than non-food formats and economies of replication.
Dressmann has a very strong brand, which is known internationally, and stands for as mentioned before good quality, price and service. This indicates that the company’s strong brand has meant a lot in their internationalization process.
Dressmann entered the international market because of many reasons. The first one is the fact that the company believed that they had a unique product and business concept they thought would fit the international clothing retailing market. However, for some of the company’s geographically close markets, like the Nordic countries the main reason to enter was because of the cultural closeness to Dressmann´s home market. A great part of the company’s internationalization was also because of the fact that their home market was saturated. To be able for Dressmann to gain higher profits and expansion, it was important for the company to start exporting its products. Internationalization in some of Dressmann´s markets for example Latvia was very much based on that the Latvian market at that time still was unexplored.
43 Analysis
Another factor for the company’s internationalization was of course to gain economies of scale.
According to Alexanders (2001) and Akehurst, Alexander, (1995) , there are two important factors why retailers invest in the foreign markets. Saturation in the home market and the companies desire to export. (Williams 1992), states that companies have various growth-rated motives to enter the international arena these are: to increase sales, expansion into underdeveloped markets with larger higher growth rates and when expansion goals cannot be achieved domestically. Others Dawson (1994), argue the importance of opportunity: the opportunity to get access to new management ideas or technology which later will be transferred to the home market. This may be important in areas such as use of information technology. Also Sternquvist (1998), gives reasons for internationalization of retailing companies namely: mature home market low growth potential, possession of a unique market form, intense competition at home and first-mover advantage. There are many more factors for internationalization of retailing companies. However, it has been noticed that the most important reasons are the factors stated above.
It has been identified that when Dressmann started to internationalize, it was affected by most all of the factors that are mentioned above. Besides the factors already mentioned Dressmann has two other different approaches which are: the possession of a good business concept and the cultural closeness of the their markets.
The main problem for Dressmann when going international was to find reliable and business minded people to work with. However, other factors like cultural differences and adaptation of products has also affected the company. Despite the physical closeness of all their markets, Dressmann can never escape the cultural differences that exist in some of the markets. This can be seen in the company’s range of products in the different markets. Although the same products are sold in all the markets, small adaptations must be made for each market to suit the customer demands.
Alexanders (2000), states that when retailing companies try to expand into the international arena, there are curtain problems that can occur. Among many problems, site acquisitions are the most notable one. The problems of site acquisitions are: different consumer tastes and different social conditions. Cultural environment is another factor that is mentioned by Alexanders (2000) which the company must take into consideration.
When Dressmann started to expand the company noticed that cultural differences, different social conditions and cultural environment were something they had to get used to and be able to adapt to. However, Dressmann´s main concern was to find reliable people with good knowledge about that particular market to work with.
44 Analysis
5.2 Choice of International Markets
By comparing the empirical data with the literature, it will be analyzed how Dressmann selects its international markets and which factors are most influential. Czinkota, Ronkainen & Moffet, (1996) state that when a company chooses international market/markets they use the Screening Process which is divided in four different steps namely: Preliminary Screening, Estimation Market Potential, Estimating sales potential and Identifying segment. Dressmann more or less fallowed these steps in the following manner:
Step one: Preliminary Screening
In the preliminary screening Dressmann makes an overview of all the potential countries they can choose from. In this stage secondary data is mainly used to get hold of information about the countries. In this stage, several factors like gross national product per capita and product, product and industry specific factors, population, total import and export of the country etc are taken in consideration. When looking at these factors a selection is made, and the countries that are not suitable are rejected. The company will reject more countries in each step until they find their target market.
According to Czinkota, Ronkeinen & Moffet, (1996) in the preliminary screening all countries are included. By looking at the secondary data gathered, those countries that do not fit the company’s demands are rejected. When comparing the data gathered with the theory, it can be noticed that Dressmann follows the preliminary screening process to the last detail.
Step two: Estimating Market Potential
In the second stage Dressmann takes several facts into consideration. Factors like market size and market income elasticity are closely looked at. Since the preliminary data does not give the company all the information they need a new data collection in the form of input-output analysis is made. An input-output analysis gives the company an overview of the structure and the economy of that particular market. Since the data gathered with the input-output analysis is not reliable since it’s based on secondary data, a demand pattern analysis is made to see the growth and decline in manufacturing sector for that particular market.
It is stated by Czinkota, Ronkainen & Moffet, (1996), that in the second step of the screening process the market potential of the prospective countries are estimated. Among factors that are more looked at, market size and market potential can be found. An input-output analysis, demand pattern analysis, estimation by analogy, multiple factor indexes and income elasticity of demand are used to assess the size of the existing market and forecast the size of the future markets. Because of lack of resources and primary data these methods are used by the company to get the information they need to be able to make their decision. Out of the five methods used to get more information about a market, Dressmann uses only two of them namely: input-output analysis and the demand pattern analysis. These two methods gives the company the needed information to be able to get to the next step of the screening process.
45 Analysis
Step three: Estimating Sales Potential
In the third step Dressmann looks at the sales potential in the remaining countries, which are left after the first and second step. By looking at the sales potential in the remaining countries the company can anticipate what kind of sales Dressmann will have in the future in those countries/markets. When an estimation of the sales potential is made, Dressmann uses five factors, which are: competition, market, consumer, product and channel structure.
The literature regarding step three in the screening process indicates that when marketers have gained better understanding about the markets, a company’s possibility in these markets are still unknown. To be able for a company to arrive at an estimated sale, the marketers need to collect product and market specific data, which is made by collected data from competition, market, consumer, product and channel structure.
To get more information about their sales potential in a market, Dressmann uses all these five factors to get the data needed to decide the company’s estimated sales potential in those specific markets.
Step four: Identifying Segments
This last step of the screening process is very important for Dressmann. Since the company sells a wide range of products, Dressmann has divided its markets into two different segments based on consumer distinctiveness and age. Besides this factor like geographic location, cultural factors, economic factors and political and legal factors are taken in consideration. All Dressmann´s markets have so far been very similar to each other and as mentioned before, the company usually chooses markets that are close to the Dressmann´s home market. Although the company has two segments, which is age, oriented and for men only the company has not chosen specific segments for their products. This is because the fact that Dressmann wants to sell its products to a wide range of customers.
According to Kotler & Armstrong, (1996) and Czinkota, Ronkaeinen and Moffet, (1998), to sell the same product to all buyers is something impossible that a company must understand. A company must divide its market/markets into segments. Segmentation in this case is based on customer characteristics, which are: demographics, operating variables, purchasing approach, situational factors and personal charismatic. But when it comes to segmentation on an international level, variables like geographic location, economic factors, political and legal factors and cultural factors have to be taken in consideration. When a company uses these variables to segment on the international arena, each country is then seen as a segment.
Deressmann has divided each of their international markets into two segments only for men. Both segments are age-oriented where in the main segment the customers are men between the ages 30-50 years old and the other which is a wide range of age segment with ages between 20-70 years old. However, the company still takes geographic location, cultural factors economic factors and political and legal factors into consideration. Despite the fact that all Dressmann have chosen markets that are close to its home market. It is however, stated that Dressmann does not try to choose a specific segment for their products since the company tries to reach a multitude range of customers.
46 Analysis
5.3 International Entry Market Strategies
When Dressmann first started to expand it happened through exporting to countries close to their home market. Exporting gave the company a hint of how the new markets reacted to their product and business concept. Since Dressmann is a privately owned men’s clothing retail company, all the company’s business outside the home market are wholly owned subsidiaries. By starting wholly owned subsidiaries Dressmann could control the entire business themselves, everything from store location to manufacturing of products and the logistics channels. This means that the company when entering a new market uses a combination of exporting and wholly owned subsidiary. When a decision is made in the company it is usually taken at the Dressmann headquarters and the Vaner brothers outside Oslo, Norway. The information is than sent to the company’s international markets where changes that are required are made to suite that particular market.
When entering a new market Dressmann always selects a couple of employees who have great knowledge about the company and who have worked in it for a long time to help the new staff and personal at the new market to get settled in Dressmann´s way of “making business”. When the new market is established the experienced employees will move back home to their original locations and positions.
According to Sternquvist (1998) when retailing companies want to become involved in international retailing they have several options of getting their products to the final consumer namely: exporting, license, joint venture and wholly owned subsidiaries. Also Dawson, (1994) mentions exporting as a strategy for retailing companies to enter the international market.
In the beginning when Dressmann started to enter new markets it happened through exporting. Today however, when the company enters a new market they use wholly owned subsidiaries to establish themselves in that market. But the first move, exporting still remains since it is the exporting that gives the company if the market is a good investment to enter or not.
5.4 Expansion Strategies
Dressmann started to expand because of the saturated market in Norway and the fear of imitators copying their business concept. Despite this, competition is a factor that Dressmann dose not fear and embraces. This is because the company believes that is the competition in the market that has made them stronger. Competition is good for Dressmann since it makes them think broader and develop new ideas in a smarter way. Today the company faces strong competition in the retailing industry. Dressmann has today an exceptional business concept and use its exact replication of their standard product in all their international markets.
Sternquvist, (1998) argues that there are four types of retailing firms which all have the desire to enter the international arena. These are: the strong, the weak, the unique and the standard.
Dressmann is a combination of the strong and the unique type of retailing company expanding on the international arena and this is what makes the company successful. The unique type of is often said to expand in less developed countries. However, the data collected from Dressmann shows that the company doses not make any distinctions between developed and
47 Analysis less developed countries when expanding internationally. But Dressmann does not deny that some of their markets have been less developed countries like Latvia.
The fashion clothing retailing industry is a very flexible environment to work in. In Dressmann´s case the company always fallows the trend of the fashion and since fashion changes so must the company’s range of products. If the Dressmann ignores to make changes other competitors will get advantage of the situation and “knock” them out of the market. This is why the company always has its eyes open for new trends and styles in fashion, the changes. By paying attention to the company’s flexible working environment, Dressmann can assure that they will not lose their place in the market.
According to Morgenstein & Stoning (1992), retailers are greatly affected by changes around them. The constant change that occurs is explained by the authors with the help of Malcolm P. McNair´s model the wheel of retailing. The model explains that new retailers who enter the market are not as strong as those already existing once. By entering the market a wheel of change is started. These retailers are those who often have low price as their competitive tool, which attracts customers. This affects the entire market. After a while, when these retailers are established in the market, new retailers will enter and copy their strategy. This situation makes the already existing retailers to make changes so that they can hold their position on the market. When the retailers who in the first place entered the market are established, new retailers will enter the market and changes must be one once again. Every time new retailers enter the market, a new wheel of change is started.
Dressmann´s approach to this problem is by always looking for new trends and styles in men’s fashion. By doing this, the company can manufacture the products that are modern and in time with fashion which usually is products that the customers demand. The fact that Dressmann has good prices and quality for their products dose not make them less competitive. Once again this shows that Dressmann uses competition as a tool for success.
48 Conclusion & Implications
6. Conclusions & Implications
This chapter will provide a discussion based on the research questions as well as conclusions drawn from the analysis of the empirical data. Furthermore, implications and suggestions for future research will be presented in this chapter.
The purpose of this study was to gain better understanding of how retailing clothing companies do when they enter the international arena. This purpose has been reached by answering the research questions: Why do clothing retailing companies enter international markets? How do clothing retail companies choose their entry into foreign markets? and How can the expansion strategies of clothing retailing companies in foreign markets be described?
Due to the fact that this is a single-case study, and only one specific type of retailing clothing company has been looked at, generalizations that apply to all such organizations are hard to make. Nevertheless, this study provides some indications of how retailing clothing companies do when they internationalize.
6.1 Research Question One – Why do clothing retail companies enter international markets?
There are many reasons for Dressmann to choose to enter the international arena. To mention a few the saturated market in Norway, to gain better profits and economic of scale, the fear of losing domestic market share to other competitors, to offer of a unique business concept/product and the desire to export where a few of the reasons. However, for some of Dressmann´s international markets like the Nordic countries geographic proximity had a lot to do with the company’s decision to enter these markets.
However, there are some external factors that have affected the company in an encouraging way to enter the international arena. Technological advance, market force, the blocking of barriers and trading blocks (governmental policies), the issue of cost, and strong competition which is seen as a tool for the company to develop are some of the factors that should be mentioned. Two of the most important external factors for the company are: logistic channels and homogenous markets. It is very important for Dressmann to have a working logistics in each market they exist in since it is the only way for them to get the product to the final customer. Furthermore, as mentioned before, the company sells a broad range of products and they actually sell the same products in all their markets since there are no major differences in customers’ preferences.
49 Conclusion & Implications
6.2 Research Question Two - How do clothing retail companies select their foreign markets?
As a retail clothing company Dressmann has realized the importance of market research and investigation of markets before entering them. It has been identified that Dressmann uses all stages suggested in the screening process in target market choice developed by Czinkota, Ronkainen and Moffett (1996). Czinkota, Ronkainen and Moffett (1996) emphasize the importance of performing the screening process in target market choice to be able to make the right market choice. This can be detected in Dressmann’s selection of foreign markets. The company uses all the four steps in the screening process but not every factor under each step is taken into consideration.
Dressmann has understood the significance of developing good knowledge about a market and the company conducts information frequently about their markets. Dressmann divides its markets in two segments, which is based on age and gender. The first segment is men in the age range of 30-50 years old and the second and the broader segment are men between the ages of 20-70 years old. Constant information is needed about the markets for the Dressmann to be able to suite their customer demands. Despite the fact that Dressmann´s international markets are close to their home market, the cultural differences in each market always affect the company.
Dressmann always analyses the markets the company are planning to enter. Here specific methods are used like: input-output analysis, demand patterns in that market and the markets income elasticity to be able to estimate the market potential. Besides these analyses also demand pattern analysis and income elasticity analysis are to be able to see the growth and decline in manufacturing sector and the connection between demand and economic progress as indicated by growth in income.
There is no market where Dressmann has felt secure to be in from the start. To trust a market is something that the company has learned through the years. However, the company always makes an estimation of sales in their target market. This is done by looking at five different categories in the potential market according to the respondent, competition, market, consumer, product and a very important factor for the company, the channel structure. Logistics is very important for Dressmann since they are the unit who get the company’s products to the final customer. Dressmann always uses the already existing logistic and structure channels but this is not the case in all their markets for example in Germany where the company had to rebuild a channel structure to be able to get logistics in that market to work.
50 Conclusion & Implications
6.3 Research Question Three - How do clothing retail companies choose their entry into foreign markets?
Dressmann always starts its internationalization with exporting. The company uses exporting as a tool to see how the market reacts to their business concept and products. When Dressmann feels that the market is ready, they will enter the market by starting wholly owned subsidiaries. Since Dressmann is a privately owned retailing clothing company, wholly owned subsidiary is the topical choice for the company since they want to be able to control everything that has to do with Dressmanns business. Thus, Dressmann uses a combination of exporting and wholly owned subsidiary to enter a new market. Decisions that are made concerning Dressmann are made at the Vaner Group headquarters outside Oslo, Norway. Form there information is sent to the companies international markets where adaptations are made to suite that particular market.
According to the findings, Dressmann relies on competent and reliable people. When entering a new market, the company usually sends some of their most competent employees to help and teach that market Dressmann´s way of making business. The veterans are later repositioned to there original location/market.
6.4 Research Question Four - How can the expansion strategies of clothing retailing companies in foreign markets be described?
Dressmann is a company that has a strong competition but the competition is not something that they are afraid of. The company has an exceptional concept and uses its exact reproduction of their standard product also on the international arena. According to the findings, when Dressmann enters the international arena, no distinctions are made between developed and developing countries. On the other hand, it became confirmed that the establishment in Latvia was because of the fact that the market there was unexplored. However, Dressmann´s sales have been more successful in developed countries than in developing countries.
Even if Dressmann uses its exact reproduction of their standard products the company has noticed the importance of being able to adapt. To be able to survive in the company’s competitive environment the Dressmann always has its eyes open and looks for new trends and style in fashion. This issue is very important for the company since the products they sell today might not be “in fashion” in two or three months. For Dressmann competition is not a negative factor. The company believes that strong competition forces Dressmann to develop and come up with new ideas and ways of making business.
6.5 Final Conclusion
The purpose of this study was to gain a better understanding of how clothing retailing companies do when they enter the international arena. I decided to conduct my research on a retailing clothing company due to the diversity of retailing business. In retrospect to this purpose, it is amazing to see how clothing retailing companies’ efforts in the retailing industry often accordance with efforts explained in the retailing literature. Regarding the entry strategies and factors affecting companies when entering the international arena, I believe that research; patience, accuracy and flexibility are essential since the retailing industry is a very tough market to be active in. This implies that clothing retiling companies must be aware of the retailing markets` every change.
51 Conclusion & Implications
6.6 Implications
6.6.1 Implications for Management
I believe that an important consideration for management in clothing retailing companies is to establish a special marketing unit which will act in the potential target market. It is necessary for managers to acquire valid information about the target market. This method is of course very costly but in the long run I believe that the management will se this move as a benefit for their company’s business. Furthermore, it must be pointed out that since some markets are very different from the management’s home market, strategic market planning must be applied to allocate resources as effectively as possible. Therefore, management should encourage strategic market planning more and also encourage their marketers to visit the considered market/markets. Moreover, it is of great importance for management to evaluate the result of the primary data collected in the target market carefully to avoid wasting of resources.
6.6.2 Implications for Theory and Further Research
This study increased the understanding of how clothing retailing companies carry out when they enter the international arena. Since few studies have been done about this specific area of retailing, I believe that there are many areas that future researchers can investigate. However, this study contributes to present theories regarding internationalization of clothing retailing companies.
There are few studies conducted in this area of retailing. Furthermore, most literature on this subject is hard to find. The theories regarding retailing are always about retailing in general and not about specifically clothing retailing companies. I believe that an interesting area of future research could be an in-depth study of one of the steps in the screening process in target market choice. Another interesting area for further studies is how international clothing retailing companies do when they feel threatened by their competitors in the international market. Multiple case studies within specific retailing chains shall also shed light on aspects unable to discover through the present study.
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Appendices
Appendix I: Interview Guide – English Version
Appendix II: Interview Guide – Swedish Version
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Appendix I Interview Guide – English Version
Respondent
1. What is your position at the company? 2. How long have you been working for the company? 3. How long have you been working at your current position?
• Why do clothing retail companies choose to enter a foreign market?
1. Why did your company choose to enter the international arena? 2. What factors are/is important according to your company when entering the international arena? 3. What internationalizing, are their any external factors affecting your company?
• How do clothing retail companies select their foreign markets?
4. How dose your company select its target markets? Are there any specific steps that are fallowed, in that case what are the steps?
• How do clothing retail companies choose their entry into foreign markets?
5. How can the success of clothing retailing companies within fashion retailing be explained? Why is your company so successful? What is the main reason for your company’s success? 6. Why dose a retailing company like yours choice to internationalize? What factors dose your company consider when internationalizing? 7. What problems do occur according to your company when internationalizing? What problems do you face/ have you faced?
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• How can the expansion strategies of clothing retail companies in foreign markets be described?
8. What/which methods dose your company use when entering a new market/markets? 9. There are different kinds of retailing companies, which internationalize, which one categorizes your company? 10. How dose your company do when you make changes on your market? How dose the change/changes affect your home/international markets? 11. What strategies dose your company use to enter the international arena? 12. How do you think your company’s capacity to change (change in this case means, changes of products, prices, location etc.)?
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Appendix II Intervjuguide – Svensk Version
Respondent
4. Vilken är din position inom företaget? 5. Hur länge har du varit anställd inom företaget? 6. Hur länge har du arbetat på din nuvarande position?
• Why do clothing retail companies choose to enter a foreign market?
13. Varför började företaget internationalisera sig? 14. Vilka faktorer ansåg/anser företaget vara viktiga för att internationalisera sig? 15. Vid internationalisering finns det externa effekter som påverkar företaget. Vilka externa effekter har påverkat företaget vid internationalisering?
• How do clothing retail companies select their foreign markets?
16. Hur väljer företaget sina marknader? Finns det några speciella steg som följs. Isåfall, vad är dessa steg?
• How do clothing retail companies choose their entry into foreign markets?
17. Varför är retailing inom modeindustrin så framgångsrik ur företagets synvinkel? Vad beror detta på? 18. Varför väljer ett retailing företag som ert att internationalisera sig? Vilka faktorer spelar roll vid internationaliseringen? 19. Vilka problem anser just ert företag att det uppstår med att internationalisera sig, dvs vilka problem stöter/stötte ni på?
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• How can the expansion strategies of clothing retail companies in foreign markets be described?
20. Vilka/vilken metod har företaget när de väljer att gå in i nya marknader? Finns det speciella steg? Isåfall vilka? 21. Det finns olika typer av retailing företag som internationalisera sig. Vilken av dessa karakteriserar ert företag? 22. Hur gör företaget när de ska genomföra förändringar på sin markand? Hur på vekar det inhemska o internationella affärerna? 23. Vilka strategier använder sig retailing företag för att komma in på den internationella arenan? 24. Hur anser du att företagets kapacitet till förändring är. (med förändring menas förändring av priser, lokalisering, produkter etc)?
57 List of Referenses
REFERENCES
Books
Aker, D.A,. Kumar, V., & Day, G.S. (1998) Marketing Research (6th ed.). New York: John Wiley & Sons, Inc.
Czinkota, M.R, Ronkainen, I.A (2001). International Business (6 th ed.) Forth Worth: Harcourt College Publishers.
Czinkota, M.R, Ronkainen, I.A (1998). International Business (5 th ed.) Forth Worth: Harcourt College Publishers.
Czinkota, M.R, Ronkainen, I.A & Moffet, M.H (1996). International Business (4 th ed.) Forth Worth: Harcourt College Publishers.
Holme, I.M., & Solvang, B.K. (1997). Forskningsmetodik- om Kvalitativ och Kvantitativa Metoder (2nd ed.). Lund: Studentlitteratur
Johansson, J., Vahlne, J.E., (1977), The Internationalization Process of the Firms- a model of knowledge development and increasing market commitments, Journal of International Business Studies, Spring/Summer. P. 23-32
Kotler, P., Armstrong, G (1996). Principles of marketing (7th ed.) Englewood Cliffs, N.J. : Prentice-Hall, cop
Miles, M.,B, Huberman A.,M (1994). An Extended Source Book- Qualitative Data Analysis (2nd ed.) Thousand Osak: Sage Publication
Morgenstein, M, Stoning, H (1992). Modern retailing : management principles and practices (3 rd.). Englewood Cliffs, N.J: Prentice Hall ; London : Prentice Hall International
Nyberg, R. (2000). Skriva Venetnskapliga Uppsatser och Avhandlingar- med Stöd av IT (4th ed.). Lund: Studentlitteratur
Sternquvist, B (1998). International Retailing. New York: Fairchild Publication
Wiedersheim-Paul, F., Eriksson, L.T. (1998). Att Utreda, Forska och Rapportera (5th ed.) Malmö: Liber Utbildning
Yin, R., K. (1994). Case Study Research (2th ed.). Thousand Oaks, CA : Sage, cop
Zinkmund, W.G. (2000). Business Research Methods (6th ed.). Fort Worth: Harcourt College Publihers
58 List of Referenses
Articles
Akehurst, G., Alexander, N (1995). The Internationalization Process in Retailing. Service Industries Journal. Vol 15. Issue 4
Alexanders, N. (2001). Retailers and International Markets: Motives for Expansion. Retailers International Markets. 7,4.
Alexanders, N., Mayers, H (2000). The retail internationalization process. International Marketing Review. Vol 17. No. 4/5
Anderson, V., Graham, S., & Lawrence, P (1998). Learning to Internationalize. Journal of Management Development. Vol 17, No. 7
Arnold, S. (2002). Lesson Learned From the World’s Best Retailers. International Journal of Retail & Distribution Management. Vol. 30, No. 11
Braker, T., Walker, D. M & Walker, T (1995). Doing business internationally : the guide to cross-cultural success. Burr Ridge, Ill. : Irwin, cop.
Doherty, A. (2000). Factors Influencing International Retailers Market Entry Mode Strategy: Qualitative Evidence from the UK Fashion Sector. Journal of Marketing Management, 16, 223-2245.
Doherty, A (2001). Fashion marketing [electronic resource] : building the research agenda. European Journal of Marketing. Vol 38, No. 7
Manlova, T., Brush, C., Edelman, L., F, Greene, P., G (2002). Internationalization of small Firms. International Small Business Jeournal. Vol 20, No. 1
Pellegrini, L. (2001). Alternatives for growth and internationalization in retailing. Journal of Marketing.
Vida, I., Fairhurst, A (1998). International Expansion of Retail Firms: A Theoretical Approach for Future Investigations. Journal of Retailing and Consumer Service. Vol 5, No. 3
Whitehead. M., B (1992) Internationalization of Retailing: Developing New Perspectives. European Journal of Marketing. Vol 26, No. 8/9 Dawson, (1994)
Williams, D. (1992). Retailer Internationalization: An Empirical Inquiry. European Journal of Marketing. Vol 26, No. 8/9
Internet www.dressmann.se www.hm.com
59 List of Referenses
Interview
Lars Hansson, Dressmann, Sweden 05-03-15
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